Bond sales lifted to record
The country is to sell a record amount of government debt this year as it battles the economic fallout from COVID-19, testing the level of market demand for its bonds. The Debt Management Office announced plans to sell another ￡50 billion (US$61.7 billion) of gilts, bringing its issuance this fiscal year through August to ￡275 billion. A survey of primary dealers forecast ￡412 billion of issuance for the year. While the Bank of England is helping to keep bond yields in check through its asset-purchase program, the latest figures are likely to add to concern over borrowing levels.
Retail sales drop 12.3%
Retail sales last month fell 12.3 percent year-on-year as the COVID-19 pandemic and lockdown measures delivered a heavy blow to consumer confidence and economic recovery prospects, Ministry of Economy, Trade and Industry data showed yesterday. The decline followed a 13.9 percent drop in April, which was the biggest fall since March 1998, and was worse than an 11.6 percent fall forecast by economists in a Reuters poll. Compared with a month earlier, retail sales last month saw their first rise in three months, increasing a seasonally adjusted 2.1 percent following a 9.9 percent drop in April.
Industrial firms’ profits rise
Profits at industrial firms last month increased for the first time in six months, suggesting that the country’s economic recovery is gaining traction and brightening the outlook for manufacturing investment and jobs. Profits at industrial firms rose 6 percent year-on-year to 582.3 billion yuan (US$82.27 billion) last month, the National Bureau of Statistics said in a statement on Sunday. The rebound followed a 4.3 percent fall in April, and is its sharpest monthly gain since March last year. For the first five months of this year, industrial firms’ profits fell 19.3 percent from the same period last year to 1.84 trillion yuan.
Foreign reserves inch up
Foreign reserves rose slightly last month after record declines in the previous two months when the kingdom had used tens of billions of dollars to back investments of its sovereign wealth fund. Net foreign assets of the Saudi Arabian Monetary Authority increased to US$444.82 billion last month from US$444.1 billion in April, data from the central bank showed on Sunday. Saudi Arabia had transferred US$40 billion in reserves to the Public Investment Fund between March and April to back acquisitions of stakes in overseas companies.
Commerzbank may cut jobs
Commerzbank AG chief executive officer Martin Zielke might eliminate more than 7,000 jobs and close about 400 branches as he tries to respond to frustration among shareholders, including the German government and Cerberus Capital Management, over the pace of cost-cutting efforts, people familiar with the matter said. Zielke and Commerzbank chief financial officer Bettina Orlopp could present the cost-reduction targets as the cornerstone of a broader restructuring plan at a meeting of the supervisory board tomorrow, the people said. The final goals have not been decided yet, partly because several executives are skeptical about whether cuts of this scale are feasible. The leadership is also considering less extreme reductions, the people said, asking not to be identified because the discussions are private.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
Nano-X Imaging Ltd, a start-up founded by Israeli investor Ran Poliakine, is joining forces with South Korean chipmaker SK Hynix Inc to build a machine that could disrupt a century-old X-ray industry. Valued at about US$2 billion after listing on the NASDAQ last month, Nano-X is seeking to transform a multibillion-dollar industry that has essentially relied on the same technology since Nobel Prize in Physics winner Wilhelm Roentgen discovered X-rays in the late 19th century. Nano-X’s device uses semiconductors instead of metal filaments to generate X-rays. The backing of SK Hynix, the world’s second-largest maker of memory chips, is a boost for
Continental AG, which makes control units for Daimler AG cars, cannot pursue antitrust claims against a group of patent owners, including Qualcomm Inc, which are seeking royalties on telecommunications technology, a federal judge in Texas ruled. Avanci LLC, a licensing pool formed by Qualcomm, Nokia Oyj, Sharp Corp and other owners of patents on technology standards, is not breaching antitrust laws when it negotiates license agreements with automakers rather than the component makers, Barbara Lynn, chief district judge for the Northern District of Texas, said in dismissing the suit in a decision posted on Friday. The licensing group charges US$15 per vehicle
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into